Who Controls Your Television?

Today, consumers can digitally record their favorite television shows,
move recordings to portable video players, excerpt a small clip to
include in a home video, and much more. The digital television
transition promises innovation and competition in even more great
gadgets that will give consumers unparalleled control over their
media.

But an inter-industry organization that creates television and
video specifications used in Europe, Australia, and much of Africa and
Asia is laying the foundation for a far different future -- one in
which major content providers get a veto over innovation and consumers
face draconian digital rights management (DRM)
restrictions on the use of TV content. At the behest of American movie
and television studios, the Digital Video Broadcasting Project (DVB)
is devising standards to ensure that digital television devices obey
content providers' commands rather than consumers' desires. These
restrictions will take away consumers' rights and abilities to use
lawfully-acquired content so that each use can be sold back to them
piecemeal.

Consumers would never choose this future, so Hollywood will try to
force it on them by regulatory fiat. DVB's imprimatur may put
restrictive standards on the fast-track to becoming legally-enforced
mandates, and existing laws already limit evasion of DRM even for
lawful purposes. In effect, private DRM standards will trump national
laws that have traditionally protected the public's interests and
carefully circumscribed copyright holders' rights.

Hollywood has long pursuedthis goal in the U.S., but its schemes in DVB have
taken place behind the public's back and outside of scrutiny by
elected officials. In this paper, we will summarize and expose
Hollywood's plan.

The Electronic Frontier Foundation (EFF) is the only public
interest group to have attended DVB's closed technical meetings. As a
condition of participation, DVB imposed restrictions on our ability to
report on these meetings. Now, after key parts of DVB's new DRM
specification have been sent to the European standards body and may
soon be provided to other EU regulators, we are releasing this paper
to help consumer organizations and EU regulators understand the
significant public policy implications of various DVB work items.

CPCM: A System to Control Innovation, Competition, and Television Viewers

Despite record profits in recent years, American movie and television
studios have not relented in their cries that new technologies are a
mortal threat to their industry. They sued to block the VCR and the
first mass-market Digital Video Recorder (DVR) in the U.S., and,
having failed to stamp out recording in those efforts, they have
increasingly turned to creating restrictive technical standards backed
by law.

Through DVB, the studios have taken this strategy
global. DVB's members include Hollywood studios, major pay TV
providers, free TV broadcasters, and some of the largest technology
companies in the world. The consortium was founded in 1993 for the
specific purpose of crafting technical rules for receiving digital
television. Currently, DVB standards are limited to getting TV signals
to your house, but they do not limit what you do with those signals
after they've entered the privacy of your home. Moreover, they do not
require technology developers to pass a user-restriction litmus test
before building new devices.

But that may soon change. Principally 1 at the studios' behest, DVB has been working
since 2003 on an elaborate television DRM scheme called Content
Protection and Copy Management (CPCM). Its unparalleled restrictions
include:

Enforcing severe home recording and copying limitations.
CPCM will allow content providers to apply copy restriction labels to
broadcast streams. For example, a program could be marked as "Copy
Never." In turn, your DVRs and others devices receiving the signal
will have to obey and forbid copying even for home use. A content
provider could opt to allow recording but still enforce a multitude of
restrictions on copying to other devices.

Imposing controls on where you watch a program.
Even if you are given permission to move a program to your laptop or
other portable devices, "geography controls" may kick in and stop
playback once you leave home or a particular locale. These
restrictions may be enforced using tamper-proof GPS receivers built in
to your devices. CPCM can also be used to block sending video to
yourself over your own home network or the Internet, among other
things.

Dictating how you get to share shows with your own family.
CPCM can be used to examine, for instance, the frequency with which
devices are connected to a personal network and determine whether your
sharing is within an "Authorized Domain" Absurdly, DVB spent
significant time arguing over what happens to a digital video in case
of a divorce!

Breaking compatibility with your devices.
You may have already invested in new high definition displays and
receivers that rely on component analog connections or unrestricted
digital outputs, but CPCM will allow the studios to arbitrarily block
these connections. In other words, individual copyright holders can
turn your gadgets into oversized paperweights. CPCM- restricted media
will also be able to carry blacklists and revoke compatibility with
particular devices that don't enforce Hollywood's restrictions
sufficiently.

None of these restrictions need to be revealed in advance--you won't
even know ahead of time whether and how you will be able to record and
make use of particular programs or devices. The restrictions can be
changed at the whim of the rights holder. It may be that today you can
record your favorite program and transfer it to DVDs for long-term
storage. But next week, you could be prevented from recording or
archiving to DVD.

Hollywood bills the intent of CPCM as "protect[ing]" and
"enab[ling] business models," but, more precisely, they want to be
able to curtail personal uses of television content that may disrupt
their current business models. They also want to make you pay again
and again to make legitimate uses of lawfully-acquired digital
television content. For example, you've already paid for your cable
subscription, but instead of being able to "time-shift" your favorite
show to watch it later on the device of your choice, content providers
want the power to force you to buy that show again on DVD or through
another delivery mechanism.

What about stopping "Internet piracy"? CPCM has nothing to do with
that -- it will fail to stop or even slow mass unauthorized online
distribution of copyrighted content. No matter how elaborate the DRM,
popular content will inevitably be decrypted by some percentage of
users and then placed online, making it readily-available to everyone
else. 2 CPCM's uniquely fine- grained
restrictions are simply intended to make it more capable of
arbitrarily stopping legitimate personal uses.

CPCM won't just harm consumers by limiting what they can do with TV
content. It will also choke off innovation and competition by limiting
who can enter the device market. Innovators won't be able to implement
a publicly available specification to create a CPCM-compliant
device. Instead, they'll be forced to beg permission from a CPCM
licensing authority. Any novel technical designs and features will
have to be cleared through this authority before they can be
introduced in the marketplace.

Large incumbents -- particularly those who participated in DVB and
could shape the compliance process -- might be able to handle the
transaction costs of clearing this licensing authority. But for small
firms and start-up innovators, those costs might be a prohibitive
barrier to entry.

Open source tools will by definition be shut out of the market. The
success of software like the GNU/Linux operating system and the
Mozilla Firefox browsers demonstrate how open source software can
provide benefits to users and meaningful competition in the
market. Yet, because DVB's standards demand that manufacturers design
their technologies to resist end-user modification, open source
innovation for digital television will be blocked.

Beyond DVB: DRM Backed by Law

Hollywood also likes to say that CPCM is meant to protect its legal
rights. But national laws have never given content providers such
comprehensive control over users and innovation.

The studios have a plan to effectively change that, too, patterned
explicitly after previous actions in the U.S. DVB is developing
technical standards that are intended to serve as the basis for legal
regulations that will mandate device manufacturers to use CPCM. These
standards will up-end the current innovation environment and require
innovators to first seek permission from a compliance body in order to
create compatible devices.

DVB is currently revising the Common Interface (CI) standard, which
devices can rely on to receive pay TV from many different
providers. Today, CI makes sure that consumers cannot get TV they
haven't paid for, but it places no restrictions on use after lawful,
authorized reception; by design, consumers can choose any device they
prefer, with whatever recording features they like best. In contrast,
CI version 2 will force devices to respond to CPCM, and these devices
will not be compatible with tools that rely on CI version 1.

Once the revision is complete, DVB will likely seek regulatory
approval from the European Telecommunications Standards Institute
(ETSI). ETSI's approval process is supposed to be a substantive
examination, but because of the deference given to DVB on technical
issues, DVB- proposed standards are generally approved as standards
with nothing more than a cosmetic review. Formal adoption by ETSI will
give DVB's anti-consumer standards a patina of public legitimacy
undeserved by its private drafting process. The new CI standard could
also become the basis for an EU directive. 3

Meanwhile, free over-the-air TV is currently broadcast unencrypted, but DVB is designing a way
for it to be encrypted by devices at the point of reception. Broadcasts will include a DRM "flag"
-- a set of data that rides alongside the broadcasted video and can signal whether content should
be CPCM encrypted with a set of standard restrictions. The default will be to turn certain CPCM
restrictions on.

Device manufacturers have no obligation to detect this
broadcast flag, so Hollywood may soon go to regulators pushing for a
mandate that bans non-compliant devices. The United Nations' World
Intellectual Property Organization (WIPO) is currently presiding over
negotiations for a Broadcasting Treaty, which could provide the legal
framework for national technology mandate laws. 4 Hollywood could also seek broadcast flag
mandates by lobbying individual Member States within the EU. 5

Finally, anti-circumvention laws hamper any technology creator
or user from getting around DRM restrictions. These laws make it
illegal to manufacture or use tools to circumvent the DRM without the
copyright holders' authorization, even if the circumvention allows a
user to exercise her legal rights. Thanks to two 1996 WIPO treaties
and American media companies' lobbying, these laws already exist in
many countries throughout the world.

In combination, these laws, regulations, and standards will
expand copyright holders' control over the rights that innovators and
users have traditionally held under national laws. To serve public
policy purposes, every copyright system contains limitations and
exceptions to the exclusive rights of authors and performers. Once DRM
is in place and backed by law, however, technology creators and
consumers will be hard pressed to exercise those rights.

Conclusion: Public Interest, Consumer Rights Advocates Must Fight Back

DVB bills itself as an "open" consortium, but it was set up to do its
work in secrecy and to preclude participation from all relevant
stakeholders interested in consumers' rights or the public
interest. First, the DVB Steering Board asserts exclusive control over
how participants can publicly report on DVB committee
deliberations. Second, participation is incredibly costly, requiring
an annual 10,000 Euro membership fee and then funding to attend
meetings in different cities around the world every month. Considering
that a single standard takes years to complete Ð CPCM has been in the
works for over seven years Ð the total cost of participation in DVB
can run to hundreds of thousands of Euros. EFF was the lone public
interest group in a room full of large, established companies.
6

American studios' efforts at the regulatory level will pose a
grave danger to the public interest, yet they may also provide an
important opportunity. Public interest and consumer rights advocates
may get a critical chance to have their voices heard and to convince
policymakers to resist Hollywood's demands.

Public officials are likely to hear Hollywood threaten to withhold its
content from national markets unless DRM is in place. Similar
arguments were made when color television and VCRs were perceived as
threats to American studios' business models. Despite the concerns
expressed at the time, history has shown that the industry is able to
adapt and thrive by engaging with new technology without additional
government regulatory intervention.

The risk of a Hollywood boycott of digital television is highly
speculative, but DVB's standards are a very real threat to consumers
and technology creators. If and when American studios press for
special regulatory protection for DVB's DRM standards, public
officials must be urged to protect consumers' rights, sustain vibrant
competition and innovation, and call Hollywood's bluff.

The Electronic Frontier Foundation is an international
non-governmental organization with offices in Brussels, Washington,
Toronto, and San Francisco. Founded in 1990, EFF is dedicated to
defending consumer rights, freedom of expression, privacy, and
innovation. EFF has hundreds of European donors and thousands of
constituents throughout Europe.

1 Other major content providers also are
interested in elements of CPCM, but the studios are the main driving
force behind devising DVB's DRM schemes.

2 For a further explication of
this point, see Fred von Lohmann, "Measuring the Digital Millennium
Copyright Act Against the Darknet: Implications for the Regulation of
Technological Protection Measures", 24 Loyola of Los Angeles
Entertainment Law Review 635 (2004), available at http://www.eff.org/IP/DMCA/DMCA_against_the_darknet.pdf.

3Without changing CI or achieving further regulations,
Hollywood could choose to only license content to providers who
implement post-reception DRM. However, CI currently has significant
inertia in the market -- because many providers and users rely on it,
Hollywood would like to avoid this path. Certain European Commission
rules also require manufacturers to implement CI, and thus altering
this standard could speed along the intrusion of DRM into pay TV
devices. The US equivalent in this domain is Hollywood's intrusion
into the creation of the 'plug and play' standards for digital cable
compatibility. With the Federal Communication Commission's blessings,
the CableCARD system was allowed to include post- reception DRM. See
http://www.eff.org/IP/pnp.

5
EFF helped a coalition of groups mount a successful legal challenge to
an extremely similar mandate in the US, see http://www.eff.org/IP/broadcastflag. Hollywood
continues to press for that mandate to be reinstated.

6
Our participation was made possible by a generous grant from the MacArthur Foundation.